Leaders of hospitals that have achieved Magnet status, a standard of nursing quality, say deciding whether to commit to this journey should be based more on the vision of the board and management team and the facility's culture than on bed size or balance sheets.

Only 7 percent of the nation's eligible hospitals have earned the Magnet Recognition Program credential, conferred by the American Nurses Credentialing Center, a subsidiary of the American Nurses Association. As of November, 373 U.S. hospitals had met the rigorous requirements designed to measure the strength and quality of their nursing. Magnet organizations must file an interim monitoring report every year and may reapply for the credential every four years.

Application costs, documentation review and appraisal visit fees can run from $46,000 to $251,000, depending on bed size and resource decisions, says Karen Drenkard, R.N., executive director of the ANCC. Applicants have to clear a series of hurdles, so fees vary according to how far they proceed.

But the cost is not prohibitive, she argues, in the context of what it takes to run a hospital.

"An 800-bed hospital is a million dollars a day," Drenkard says. "For the most part, the price tag of Magnet is not really an issue for the organizations." In her former role as chief nursing officer for a five-hospital system, Drenkard had an $800 million salary budget. The $50,000 application fee seemed minor in comparison.

About 80 percent of Magnet hospitals have bed sizes of 200 or greater. But a bigger predictor than size, Drenkard says, is what kind of culture organizations have and whether they are able to change it over time.

Sharon Pappas, R.N., is chief nursing officer at 176-bed Porter Adventist Hospital, Denver. She said it took Porter about five years to achieve Magnet in 2009: two years to develop the culture and three years to work through the application.

Magnet culture is one of empowerment, shared decision-making and accountability. Organizations must excel in principles at the heart of the program, known as the 14 Forces of Magnetism, which include having visionary nursing leadership, building an environment that encourages participation, having strong representation of nurses at the top levels of management, empowering nurses in patient care, and showing superior outcomes. Magnet hospitals also have to show interdisciplinary success, meaning nurses work in collaboration with pharmacists, physicians and therapists.

"It takes everyone," Pappas says. "It's not something anyone can do alone." She says the support and energy of board members is important in any Magnet journey.

"My board backed me every step of the way. They were less concerned about the costs — they thought we should have this environment for patient care anyway," she notes. "The day the appraisal team came, I had four board members who attended the leadership interview. They wanted to tell what the impact of nurses was on Porter. I think if we were ever not designated, my board would have something to say about it."

The board also can remove any barriers to funding. "If it's a board-level commitment, then the resources [for the $50,000 application fee] will follow," Drenkard adds.

Why Some Hospitals Fail

Developing the Magnet culture is essential to achieving the designation, Drenkard says, and trying to make a quick fix to meet a requirement without changing the culture is the biggest mistake organizations make, she says.

"Some places do their assessment and they find out they don't have something. Let's say you have no peer-review process or you really don't have a way to include nurses in staff decision-making and they try to think of a quick way to fix that. ... That has to be developed and disseminated and enculturated into the fabric of the organization," she says.

"When we go on a visit, we don't talk (extensively) to the leadership. We talk to them for about an hour," Drenkard notes. "All the rest of it is at a clinician level. If it's not real, they don't do well." Teams of three or four appraisers make a three- to five-day visit to evaluate qualifying applicants on-site. They interview hundreds of staff, patients, physicians and the public.

For those who make the final cut, there can be substantial rewards. Trustees at Magnet-designated hospitals say there are direct financial returns in addition to improved outcomes and more efficient operations.

Gene Arnone, immediate past chairman of the board of AtlantiCare Regional Medical Center in Atlantic City, N.J., says nurse turnover and vacancy rates dropped when the hospital first achieved Magnet status in 2004. AtlantiCare won the status again in 2008.

"Before we had the Magnet status, we had about a 6 percent vacancy rate," he says. "Over eight years, we have grown in bed size by 20 percent, and at the same time we've been able to cut the vacancy rate to 3 percent. That vacancy rate has helped us run a much more efficient organization with much more experienced personnel. The same phenomenon occurred with our turnover rate. We had a relatively low turnover rate of 8 percent when we went into the Magnet program, and over the last couple of years we've been running about 4 percent."

Arnone says Magnet status not only has helped the organization to attract higher-quality nurses, but also to retain them longer than other hospitals.

Marcelo Rivera, M.D., board member for the 426-bed public health system Palomar Pomerado Health in San Diego County, says the board estimated the cost of applying for Magnet at about $70,000 and the cost for achieving the Forces of Magnetism at about $2.8 million.

Rivera says these weren't considered separate Magnet costs because pursuing improvements in patient safety and quality care were ingrained in the strategic plan for their current goal to build the 780,000-square-foot hospital of the future.

"The board said we were going to build the health system of the future physically, so why not help contribute to the health system of the future in terms of quality? The focus on quality came from the board," he says.

After achieving Magnet status in 2009, Palomar Pomerado quickly saw a return on investment with reduced nurse turnover, which he says was likely a direct result of investing in nurses through the Magnet journey.

"Prior to starting Magnet we had a 16 to 17 percent turnover rate," Rivera says. "Now we're down to about 6 percent." Because it costs about $40,000 to train and orient a new nurse, reduced turnover alone has the potential to save Palomar Pomerado about $1.2 million a year. He added that when nurses are better educated and empowered, they can act quickly rather than waiting for a doctor to approve a rapid-response team, for instance, and therefore cut lengths of stay. For every day cut from a length of stay, Palomar Pomerado saves about $2,500, he says.

Palomar Pomerado was unusual in that it achieved Magnet status for its entire system. Applying as a system has added risk: If one entity doesn't qualify, the system won't qualify.

In a 2010 article published in the Journal of Nursing Administration, Drenkard cites studies that show improved outcomes for Magnet hospitals vs. non-Magnet hospitals. She assigns a monetary value to the improvements based on a literature review. She says the reduced nurse vacancy and turnover rates and use of agency nurses at Magnet hospitals make up the majority of the savings. Additionally, there are other cost reductions, including fewer needlestick and musculoskeletal injuries and decreased numbers of falls and pressure ulcers that can save a 500-bed hospital $2.3 million a year.

According to one study, the estimated cost for falls is $3,000 per case. Because Magnet hospitals have been found to have a fall rate that is 10.3 percent lower than that of non-Magnet hospitals, Drenkard says, a 500-bed hospital might have 3.8 fewer cases each year and have the potential to save $11,400 annually.

Too Costly for Some?

Hospitals that achieve Magnet status almost always get recertified. Since the program's inception, only two hospitals have not been recertified: in one case, the hospital closed, and in the other, priorities shifted due to a merger.

St. Luke's Boise-Meridian (Idaho) Medical Center has received the Magnet designation three times and each year the bar gets higher, according to Barbara Wilson, board chair. "If you were at a certain level, when they come back it's not enough to be in the same spot," she says. "The empirical data get increasingly tough to meet. When we sent in our submission in the spring (of 2010), it was literally 1,000 pages of documentation."

That kind of investment in labor adds to the difficulty in deciding whether to pursue Magnet. The American Organization of Nurse Executives, an American Hospital Association subsidiary, doesn't take a position on the decision.

"There is research out there that shows a high level of satisfaction among nurses at Magnet facilities," says M.T. Meadows, R.N., director of professional practice at AONE. "What we say is organizations should work to create a work environment in which nurses and all employees can be successful and be the best that they can be.

"We do know that organizations can achieve the same outcomes, but don't have the resources—either human or financial—to pursue a Magnet journey and that can be costly," she adds.

For some hospitals, the full Magnet journey may indeed be out of reach.

"Probably about 50 percent of the hospitals in America are in a survival mode right now from a financial perspective and don't have the time or the resources to devote to what it takes to get this implemented," says AtlantiCare's Arnone. "Size is, I think, a significant factor in going forward. I'm not sure how a 50-bed hospital ... would be able to do these kinds of things. But with reform and the high likelihood that we will have consolidation or affiliations among hospitals, I think the resources will become available whereby even that 50-bed hospital can be part of that Magnet designation."

For hospitals not able or ready to devote the resources to Magnet, another less comprehensive ANCC credential, Pathway to Excellence, may be a more realistic option. While Magnet requires nursing satisfaction, patient satisfaction and excellent clinical outcomes, Pathway focuses on having a positive work environment as defined by nurses and supported by research. Seventy-five hospitals have this designation. ANCC also recently launched the Pathway to Excellence in Long Term Care program, the first recognition of its kind for long-term care facilities.

Some hospitals looking for direction in improving nursing would benefit even from just purchasing the guidelines for Magnet, Wilson says.

"If I'm at a critical access hospital with 15 beds, we might not want to spend $57,000 to apply for Magnet, but, boy, I'd really want us to buy the (application manual) ... and use that as a road map for nursing excellence," she says. "Many businesses don't want to go through applying for the award, but they find the discipline, the rigor, the thought process extraordinarily beneficial."

For those with the structure and resources for Magnet, Wilson says, she sees five main benefits in investing the time and money: There is statistical validation that Magnet facilities have better outcomes; it's a huge recruiting tool for nurses; investment is steered appropriately toward front-line employees; a Magnet atmosphere leads to more engaged employees; and it gives a hospital competitive advantage.

Magnet's impact has been recognized by U.S. News & World Report, which publishes "America's Best Hospitals" every year. The magazine considers Magnet status in the scoring for quality of inpatient care. In the 2010 listing, eight of the top 10 medical centers in the Honor Roll have the Magnet designation. In the Children's Hospital Honor Roll, six of the top eight are Magnet recognized.

"There's every reason in the world to engage your entity in trying to pursue Magnet accreditation," Wilson says. "The only caveat is, if you have not got a base or framework of high employee satisfaction, good integration between physicians and nurses and everyone else ... and if you have a traditional hospital that didn't have a progressive engagement style, you'd be wasting your money."

Marcia Frellick is a writer in Chicago.

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